Leading the Charge

Utility tries to cash in on Montana’s crashing power market

While Montanans brace for the economic sock-in-the-jaw that energy deregulation represents, energy corporations are wasting no time in early attempts to fill the void created by the wholesale liquidation of Montana’s electricity-producing facilities. Continental Energy Services Inc., is leading the pack, planning a 500 megawatt, natural gas-fired facility at a location near Butte. Dubbed the Silver Bow Generation Project, the plant also includes nearly 120 miles of pipelines and would tap into existing water supplies to facilitate a planned steam-powered turbine.

Continental has applied to the Montana Department of Environmental Quality for permits to build the plant under the old rules outlined by the Montana’s Major Facilities Siting Act (MFSA). The 30 year-old law mandates that environmental considerations be thoroughly considered before such projects are undertaken. Continental may be one of the last companies to undergo such scrutiny, at least for a while. A Feb. 8 hearing of Senate Bill 319, which would “streamline” or eliminate many of the provisions of the MFSA, was met with strong opposition from environmental groups, but the Republican-dominated Legislature is a likely bet to pass the measure.

Under such circumstances, Continental’s application may raise some eyebrows as the Department of Environmental Quality reviews the application, which the current version of MFSA gives them 60 days to do. Continental began feasibility studies for the plant two years ago, and has spent $1.3 million to complete the application process. So why would an energy conglomerate want to build a 500 megawatt generating facility two years ago in a state that at the time used slightly less than half of the electricity it generated?

The short answer is that under deregulation, the generating facilities formerly owned by Montana Power—which were financed and constructed in many instances with taxpayer dollars on the assumption that they would promote the common welfare of Montanans—are now owned by corporations who are free to sell the electricity to the highest bidder on the open market. Given the anemic nature of the Treasure State’s economy, the highest bidder under this scenario is unlikely to be a Montana utility, so the conventional wisdom in Helena dictates that new generating facilities ought to be built quickly, with less regard for environmental rules created before deregulation threatened to turn out the lights.

The long answer is more complicated. Critics of SB 319 point out that deregulation is not a natural disaster, like drought, or even entirely a social planning disaster, like an actual electricity shortage as experienced in California. While layoffs at industrial facilities in Butte and Columbia Falls are already in the works, Montana’s energy crisis in its infancy is merely a political disaster. The Legislature, the argument goes, voted us into deregulation, so they ought to be able to legislate us out of it without compromising natural resources. Not so, according to Trout Unlimited’s Bruce Farling, whose organization was part of a consortium of environmentalists in Helena to protest SB 319. He claims the Feb. 8 hearing was a mere formality.

“The deal is essentially greased,” Farling says. “What’s really going on here is that the Legislature is in a panic, they know they’ve made a mistake, and they want to save face by showing people they’re doing something. There’s really not a lot of open-minded people working in the legislature right now. The whole reason electricity is regulated is because generation is centralized and is therefore naturally a monopoly. But if we can’t get legislators to understand that, it’s not likely they’ll understand that the answer is not burning more carbon.”

Whether Continental understands Farling’s charges and chose to apply to the DEQ under the old MFSA provisions, or whether it’s simply is a politically savvy corporate entity that figured on quick profits and lax regulations before anyone else did, may remain one of the undying mysteries of deregulation. For his part, Continental spokesman Randy Morris gives a calculated response when the question is asked of him.

“We don’t have anyone from our company that’s actively lobbying for [SB] 319, and officially we are taking a neutral position on the bill,” he says. “We’ve been pleased with the process of trying to comply with the current facilities citing laws. If it happens to pass, we’ll take a look at some of the new provisions then.”

While Continental patiently awaits on a vote on SB 319 and on approval of the gas-fired plant, western Montanans can look for little solace in the extra electricity that might be produced at the Silver Bow Generation Project. The plant is extraordinarily efficient, automated, and will employ about 25 full-time workers once completed. Five hundred million watts of electricity would light a lot of Montana homes—but under deregulation, Continental is not obliged to power a single bulb in Montana. Currently, whoever pays the most will get the juice, a harsh reality evolved from a kind of political currency the Montana Legislature has plugged into with all three prongs.